Houston, Texas-based Sysco Corporation (SYY) markets and distributes a range of food and related products to the foodservice or food-away-from-home industry. Valued at a market cap of $38.7 billion, the company serves restaurants, hospitals and nursing facilities, schools and colleges, hotels and motels, industrial caterers, and other foodservice venues.
This food distribution company has lagged behind the broader market over the past 52 weeks. SYY has gained 5.6% over this time frame, while the broader S&P 500 Index ($SPX) has soared 19.3%. Moreover, on a YTD basis, the stock is up 4.5%, compared to SPX’s 8.4% rise.
Nonetheless, zooming in further, SYY has outpaced the Consumer Staples Select Sector SPDR Fund’s (XLP) 4.9% return over the past 52 weeks. However, it has lagged behind the ETF’s 5.1% surge on a YTD basis.
On Jul. 29, shares of Sysco tumbled 2.5%, despite delivering better-than-expected Q4 performance. Both its revenue of $21.1 billion and adjusted EPS of $1.48 handily exceeded the consensus estimates. Moreover, compared to the year-ago quarter, its top line grew 2.8%, while its adjusted EPS improved 6.5%, with adjusted EBITDA rising by 1.8% to $1.3 billion. Looking ahead to fiscal 2026, SYY projects sales growth of 3% to 5%, and expects adjusted EPS growth of 1% to 3%, to a range of $4.50 to $4.60.
For fiscal 2026, ending in June 2026, analysts expect Sysco’s EPS to grow 2% year over year to $4.55. The company’s earnings surprise history is mixed. It met or exceeded the consensus estimates in two of the last four quarters, while missing on two other occasions.
Among the 16 analysts covering the stock, the consensus rating is a "Moderate Buy” which is based on 11 “Strong Buy,” and five “Hold” ratings.
The configuration has remained consistent over the past three months.
On Jul. 31, Guggenheim analyst John Heinbockel maintained a "Buy" rating on Sysco and raised its price target to $85, implying a 6.4% potential upside from the current levels.
The mean price target of $85.78 represents a 7.4% premium from SYY’s current price levels, while the Street-high price target of $93 suggests an upside potential of 16.4%.
